State budget in the black

Posted on May 04, 2005 | Type: In the News | Author: Robbie Sherwood
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If Republican leaders force Gov. Janet Napolitano to blink and sign a state budget that doesn't include her top spending wishes, it won't be because the state lacks the money.

Unlike the past three recession-plagued years, state revenues are flowing in like water through a broken dam. But squabbles over school voucher programs, all-day kindergarten, a downtown medical school and assorted other programs have produced a stalemate despite the unexpected cash.

As the stalemate moves into its seventh week, lawmakers have learned that revenues for fiscal 2005-06 are expected to eclipse initial projections by $169 million, a figure that could grow even larger as the budget debate continues. In March alone, General Fund revenues were 30 percent higher than the same month last year, a sign of a strengthening job market and bullish tourism and retail returns.  

The money generated by the state's growing economy is more than enough to meet Gov. Janet Napolitano's goals for all-day kindergarten, social programs for Arizona families and a downtown medical school, while achieving Republicans' objectives for school vouchers, corporate tax credits and tax cuts.

Still, no agreement is in sight. Republican leaders want a Republican majority behind the budget. That has empowered the most conservative members of the GOP caucus, who are pushing for school choice measures in exchange for all-day kindergarten. Democrats have been cut out of the process, but Napolitano has sworn to veto any budget that includes more public money for private schools and that lacks money for a downtown Phoenix medical school.

The stalemate is boiling down to ideology, not money.

"The new revenues have zero impact on this budget because we have the money right now," said Mike Haener, Napolitano's chief lobbyist. "We have the money for the medical school . . . we have the money for all-day kindergarten, we have the money for Child Protective Services.

"This isn't about spending additional money. I don't know what it is about, but it's not about the money."

On March 21, Napolitano vetoed the Legislature's $8.2 billion budget for 2005-06, a plan based on the lower initial revenue estimate. Since then, lawmakers have worked their way slowly toward another proposal that is almost certain to be vetoed by the governor.

The debate over trading all-day kindergarten funding for private-school vouchers has garnered the most attention. But the latest plan also flattens or reduces spending for more than a dozen programs such as cash assistance for the disabled ($4 million), outreach for children's health care services ($4 million) and financial aid for college students ($2.5 million).

Republican lawmakers wanting to build a budget that needs no Democratic votes are also balking at spending $7 million to start a medical school without a more detailed plan. And, so far, there's no money aimed at about $30 million in court-ordered improvements for students struggling to learn English.

Senate President Ken Bennett cautioned that the unexpected revenues should not be considered a windfall because burgeoning school and prison populations and other obligations could still put the state in a revenue shortfall in its 2006-07 budget.

"If you spend it all, you keep yourself in a structural deficit," said Bennett, R-Prescott.

Still, Republicans already have rid the current $8.2 billion budget plan of any debt, or any dipping into the so-called "rainy day" fund, because Arizona's economy has been so strong in the past year. So the additional revenues would seem to strengthen Napolitano's negotiating position, if any negotiations with her were taking place.

Democrats in the Legislature and some Republicans contend the stalemate centers on ideology. About a dozen Republican conservatives want to see more planks from the GOP platform built into the budget, chiefly vouchers and corporate tuition-tax credits for private and parochial schools, if they are going to concede to any of Napolitano's wishes. They have enough votes for a blockade as long as House Speaker Jim Weiers and Ken Bennett refuse to look across the aisle for support. Republicans hold a 38-22 majority in the House and an 18-12 lead in the Senate.

The House seems poised to pass a budget that Napolitano has again sworn to veto. But there were signs Tuesday that some Senate Republicans were not in the mood to play chicken with Napolitano, sending and resending her a budget laden with school choice measures until time runs out on the fiscal year. They aired their grievances in an emotional caucus meeting that makes predicting an end to the stalemate even more difficult.

"I don't plan on voting for a budget that's not going to be signed," said Sen. Robert Blendu, R-Litchfield Park, who had not previously been considered a no-vote. "I would rather talk about the world that we are in. Those of you who are willing to spend your time sitting here from now until June 30th, I think you ought to spend your time trying to elect a different governor. The governor we have now has said she will not accept vouchers."

Supporters said that vouchers and corporate tuition-tax credits are worth fighting for and that they can win a battle for the public's sympathies because recent polls by the Goldwater Institute, a conservative think tank, indicate broad support for the concept of school choice. And the current budget plan meets many of Napolitano's wishes.

Sen. Carolyn Allen of Scottsdale is another Republican vowing to vote no on the current plan. That gives Bennett no room for error if the plan to force-feed Napolitano a budget is going to work. Allen said sending a budget to a sure veto is a public relations battle that lawmakers can't win.

"We're going to look like fools in the eyes of the public," Allen said.

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